Henry Schein (NSDQ:HSIC) reported third-quarter results that included enormous growth for its medical business as it beat the consensus forecast.
The Melville, N.Y.-based company posted profits of $141.7 million, or 99¢ per share, on sales of $2.8 billion for the three months ended Sept. 26, 2020, for a 1% bottom-line gain on sales growth of 13.2%.
Adjusted to exclude one-time items, earnings per share were $1.03, 24¢ ahead of Wall Street, where analysts were looking for sales of $2.5 billion.
The company reported a massive 27.8% leap in revenues for its medical segment, while its dental business also grew, registering a 6.7% jump. Medical sales reached $1 billion for the first time, according to a news release, with demand for personal protective equipment (PPE) and COVID-19-related products driving that growth.
“2020 has been an extraordinarily challenging and unpredictable year for our team, customers and suppliers,” Henry Schein chairman & CEO Stanley Bergman said in the news release. “I commend the work and sacrifice of Team Schein to support business continuity for our customers. The pandemic caused disruption to the supply chain and as suppliers reacted to increased demand for [PPE] and shortages of raw materials our markets experienced significant price volatility. As a result of the hard work and dedication of the team throughout the COVID-19 crisis, we were ready to assist our dental and medical customers, many of whom were subject to work restrictions and faced severe challenges, as they returned to their offices to provide safe, quality clinical care.
“The strong rebound in sales that began late in the second quarter continued into the third quarter, with growth over the prior year driven by sales of PPE and COVID-19-related products. … Operating margin was primarily negatively impacted by significant inventory cost adjustments associated with PPE and COVID-19 related products, offset by lower expenses. Most of the temporary expense-reduction initiatives have now ended, and although we expect PPE and COVID-19-related product sales to positively impact dental and medical consumable merchandise sales into the future, we expect overall sales growth to moderate from the third quarter.”
Henry Schein said it is not offering financial guidance for 2020 due to uncertainties surrounding the COVID-19 pandemic.
HSIC shares were down -4.1% at $60.97 per share in mid-morning trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was up 1%.
